A flak deal frenzy forthcoming?
Earlier this week Finsbury did a partial management buyout which frees it (partially) from parent WPP.
The ad giant will still hold just over 50%, Finsbury merges with Hering Schuppener and Glover Park. Executives from those three firms take the rest of the equity.
You can read the details here - https://www.provokemedia.com/latest/article/finsbury-glover-park-and-hering-schuppener-merge-as-wpp-reduces-stake
What does it mean? For one, that long-standing speculation about a Finsbury MBO was true.
Second, as m’learned colleague Jim Armitage pointed out, it may present something of a challenge to WPP. We don’t know what the exact terms of the Finsbury deal were, which means WPP shareholders can’t be sure they got a decent shake. And won’t other parts of WPP push for the same, potentially breaking up the empire Sir Martin Sorrell built?
Third, the fact that it is only a partial MBO may indicate just how hard it is to raise finance at the moment. (Or that WPP wasn’t ready to cede control.)
Fourth, perhaps the deal shows how big PR has become, and how sophisticated are the needs of clients.
As one flak put it, the days when financial PR consisted of popping in to see The Sunday Telegraph for a drink on Friday evening are long gone. (We miss them).
Most actions that a company or an executive takes nowadays are viewed through the lens of the court of public opinion. Technology has made that instantaneous and global. The most successful advisers will probably be the same.
FTI was already an international concern. Brunswick too. Maybe the rest of the top tier UK players also need a deal…
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